Friday, June 1, 2018

Facts on District Reserve Funds

An article titled “Billions of your tax dollars feed growing district reserve funds” appeared in the Philadelphia Inquirer on May 30, 2018.  It’s important to note that the article may be misleading as to available fund balances.

Owen J. Roberts School District’s available and undesignated general fund balance was $5,177,078 as of June 30, 2017, which is 5% of the following year’s budgeted expenditures. By law, Pennsylvania School Districts are not permitted to have undesignated fund balances in excess of 8% of expenditures.

The Inquirer article references a link to the Commonwealth Foundation’s website which is not only reporting undesignated reserves, but including designated reserves set aside to mitigate significant Public School Employee's Retirement System (PSERS) rate hikes that would have a negative impact on taxpayers if funds were not set aside over time to balance budgets in years where PSERS rate hikes are extreme.  For example, Owen J. Roberts set aside PSERS reserves over a 10-year period and have utilized nearly $5 million of these reserves over the last 5 years to mitigate budget shortfalls due to PSERS rate increases. Taxpayers deserve to understand that their financial interests are protected by such reserve funds. Pennsylvania School Districts deserve to be represented in light of the financial realities for which they face.



Learn more about Pennsylvania's Pension Crisis on the PSBA website at: https://www.psba.org/issue/pennsylvania-pension-crisis/

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